ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday ordered ex-Wapda distribution companies to refund 62 paisa per unit to consumers for overcharging them about Rs6.5 billion in April.

The decision was taken at a public hearing presided over by Nepra chairman Brig (Retd) Tariq Saddozai on the request of Central Power Purchase Agency (CPPA).

On behalf of distribution companies of ex-Wapda, the CPPA said the consumers should be passed on a reduction of 45-paisa per unit under the monthly fuel cost adjustment because of lower actual energy costs than earlier charged to them under estimated costs.

It said the consumers were charged a higher reference fuel charge of Rs6.7227 per unit in April but actual fuel cost turned out to be Rs6.27 per unit. Therefore, the power companies should be allowed to pass on 45-paisa per unit reduction to consumers.

The regulator, however, did not agree to the calculations of the power companies and disallowed a few adjustment claims and worked out a reduction of 62-paisa per unit.

The relief in electricity rates would not be applicable to agricultural consumers and residential consumers with less than 300 units of monthly consumption under a decision of the PML-N government that these categories were already being provided subsidised electricity and hence do not qualify for monthly fuel price cut. The KE consumers would also not benefit from the relief.

Even though the regulator ordered refund of about Rs6.5bn, the distribution companies would pass only half of the amount to consumers and retain about Rs3.3bn as windfall saving. This is because of the government policy that allows Discos to charge double the fuel cost of electricity as advance billing to consumers and refund it to only consumers above 300 units monthly consumption.

The practice helps power companies generate billions of rupees (more than Rs120bn a year) from consumers in advance and have better cash flows without financing costs.

The petitioner said about 10,135 gigawatt hours (GWh) were generated in April and 9,877 GWh could be delivered to distribution companies due to about 2.45pc losses in the transmission system.

The CPPA said the hydropower generation contributed about 15pc of total electricity generated in April because of adverse hydrological conditions. The hydropower has a zero fuel cost. Also, the wind and solar plants together contributed about 2.7pc energy at no fuel cost.

The power generation from furnace oil based power plants amounted to about 15.3pc from an historic average of about 25pc because of increasing share of LNG based power generation. The furnace oil based generation cost stood at Rs11.22 per unit in April compared to Rs10.16 per unit in February.

The natural gas based generation dropped in April to 16pc compared to 21pc in March and 24pc in February. The gas based fuel cost was worked out at Rs5.06 per unit.

On the other hand, the power production from imported liquefied natural gas (LNG) increased to almost 27pc in April, compared to 24.3pc in March and 19.2 in February. The RLNG based generation cost amounted to Rs9.01 per unit in April compared to Rs8.85 per unit in March and Rs6.33 per unit in December 2017 mainly because of higher international oil prices to which LNG supplies are pegged.

The share of coal based generation was reported at 13,86pc in April compared to 14.46pc in March. The cost of power generation from coal also increased to Rs6.44 per unit and compared to Rs5.8 per unit in February and Rs4.3 per unit in December 2017. The price of electricity import from Iran stood at Rs11.05 per unit and contributed about 0.5pc to the energy pool.

The CPPA said total energy was generated at a total cost of Rs61.4bn or Rs6.06 per unit while 2.45pc lower supply was delivered to distribution companies at a cost of Rs61.96bn or Rs6.27 per unit.

Published in Dawn, May 25th, 2018